A subdomain is part of a web address which is under the main domain, for example name.example.com. From a technical perspective, even in www.example.com the "www" part is a subdomain given that the fully qualified domain name is just "example.com". Each subdomain could have its own site and records and can also be hosted through a different company if you wish to use some feature which isn't provided by your current service provider. A good example for using a subdomain is if you have a business website and an online store under a subdomain where clients can acquire your products. You can also have a forum where they can talk about the products and by employing subdomains rather than subfolders you'll avoid any probability of all sites going down if you perform maintenance, or update one of the site scripts. Keeping your sites separated is more secure in case of a script security breach.